* Kroger leads S&P 500, Wal-Mart tops Dow
* GE drops after JPMorgan flags likely dividend cut
* Fed minutes expected at 2:00 p.m. ET
* Indexes up: Dow 0.09 pct, S&P 0.08 pct, Nasdaq 0.11 pct (Updates to early afternoon)
By Sruthi Shankar
Oct 11 (Reuters) - Gains in Wal-Mart and Johnson & Johnson nudged the Dow Jones Industrial Average to another record level on Wednesday, but the broader market was sluggish ahead of big bank earnings.
Investors also awaited the release of the minutes of the Federal Reserve’s September policy meeting.
J&J rose about 2 percent after Jefferies upgraded the stock to “buy”, saying the company’s pharma division would help it top analysts’ profit estimates.
The consumer staples sector got a boost from gains in Wal-Mart as well as from Kroger, which jumped 4.4 percent after news that it was exploring the sale of its nearly 800 convenience stores.
The focus will now shift to JPMorgan Chase and Citigroup, which report results on Thursday, with analysts warning that bank results will largely be held back by a lack of volatility, compared with a year earlier.
“Third quarter results of large banks are expected to be tepid,” said Stephen Biggar, an analyst at Argus Research. “Trading revenue (will be) down due to low volatility and loan growth remaining flat to slightly negative.”
With the S&P 500 up 14 percent in 2017, investors are betting on strong earnings growth across the S&P 500.
“Valuations are full, but not stretched at this point in time,” said Bill Northey, chief investment officer at U.S. Bank Wealth Management in Helena, Montana.
“But that won’t be the lever that drives equity market returns, it does require earnings growth to support performance.”
At 12:39 p.m. ET (1639 GMT), the Dow Jones Industrial Average was up 21.42 points, or 0.09 percent, at 22,852.1, the S&P 500 was up 2.12 points, or 0.08 percent, at 2,552.76 and the Nasdaq Composite was up 7.35 points, or 0.11 percent, at 6,594.60.
Six of the 11 major S&P indexes were lower, led by a 0.6 percent drop in telecom services index.
Financial stocks were under pressure from a slight drop in U.S. Treasury yields ahead of the release of Fed minutes, due at 2:00 p.m. ET, and auctions of three-year and 10-year notes.
Worried by signs the U.S. economy had peaked, the Fed has slowed since raising rates twice within three months at the start of this year, but has signaled one more hike is still on the cards by the end of 2017.
General Electric slipped about 1 percent after JPMorgan said a dividend cut was “increasingly likely” and lowered its price target on the stock.
Advancing issues outnumbered decliners on the NYSE by 1,604 to 1,191. On the Nasdaq, 1,495 issues rose and 1,285. (Reporting by Sruthi Shankar in Bengaluru; editing by Savio D‘Souza and Saumyadeb Chakrabarty)